Maravi

Munali Nickel project precarious

Munali Nickel project precarious
Written by Chiwoyu Sinyangwe
Tuesday, March 31, 2009 4:38:05 PM

The future of the Munali nickel project in Mazabuka has now been described as precarious by market analysts following the failure by its parent company, Albidon to secure financing agreement from its senior lenders.

Albidon which owns the country’s maiden nickel mine has been struggling to secure an agreement from its senior lenders and unsecured creditors for a US$23.8 million needed for it to remain afloat.

Last week, it entered a trading halt after failing so far to finalise funding arrangements with its Chinese backer, Jinchuan, and its senior lenders and unsecured creditors.

Albidon is on shaky ground, it is a precarious position because lenders have yet to agree to a funding deal,Ó a source within Australian Stock Exchange told The Post in a confidential note from Perth yesterday.

The latest development throws that Albidon further to the brink of administration.

The company went into a trading halt at Australian Securities Exchange last week, stating that negotiations with Jinchuan were well-advanced, but were yet to be finalised with senior lenders and unsecured creditors.

The one-time market darling said it would remain suspended from trading until it concluded the funding arrangements.

But in a stark warning, it said: If this is not achieved on a timely basis, then the company and its subsidiaries will be placed into voluntary administration.

Albidon has already closed its Munali mine because of production problems and the low nickel price. Its shares last traded at 3.9 Australian cents.

Labels: MAZABUKA DISTRICT, MUNALI NICKEL MINE

posted by MrK @ 3:38 PM